Share This Article

If You Get Rich From This, You Can Thank the Best Chicken Pad Thai Recipe in Baltimore

I love a well-made chicken pad thai.

Because my wife, Robin, is a full-fledged vegan – and there aren’t many restaurants that her, Joey and I can go to that serve dishes all three of us will like – when we go out as a family, we’ll often choose the Noodles & Co. restaurant chain (which makes a pretty decent pad thai).

The only "buy and hold" system that beats even today's volatile markets. Pro trader Keith Fitz-Gerald runs this hyper-selective (but low-maintenance) service that only buys stocks that are going up - without fail since 2000.

This fast-paced technical trading service shows regular investors how to profit just like pros - taking big, reliable gains quickly, over and over, with minimal risk. Editor D.R. Barton scours the market to identify the nearly invisible, short-term "stealth" stock trends that turn into fast gains, often in just a few days.

Movements such as the Mobile Revolution… Big Data… The Internet of Everything… and Cloud Computing (just to name a few)… are shaking the very foundation of how we live, work and play.
With the Nova-X Report, you won’t miss any of them.

In his thousands of hours of number-crunching, editor Sid Riggs discovered a pattern of profits that’s almost foolproof. He identified seven “sparks” that consistently propel small-cap stocks to new highs, making investors potentially life-changing gains in the process.

Hedge fund legend Shah Gilani's newest research service lets you work "the other side of the trade," where the money you can make is off-the-charts crazy. For those willing to break the old "buy and hold" rule, Short-Side Fortunes opens up a whole new world of investing that will allow you to make huge money when asset classes flip direction - no matter which way they turn.

Kent leverages his unparalleled connections in the energy world to extract profits from oilfield exploration, drilling, service providers, producers, pipelines, and more. Follow his closely guarded techniques for making oversized gains in the most profitable sector in history.

It's a trend that not only has serious implications, but also great profit opportunities, if you know what to expect…

A (Very) Brief History of Reserve Currencies

Along with reserve currency status come the roles of financing international trade and acting as a store of value for governments worldwide.

When we look back over the past 500 to 600 years of reserve currencies, an interesting pattern emerges.

As this chart shows, since the mid-1400s, there have been six different reserve currencies.

Tied for the shortest lifespan are Portugal and the Netherlands at 75 years, while the longest tenures are Spain and the UK, both at 110 years.

The average has been about 95 years… and the U.S. dollar has presided for the past 88 years.

As you can see, reserve currencies come and go. It's not a question of if, but when. And it appears the greenback's dominance has reached its twilight.

Until 1971, when Nixon closed the "gold window," overseas dollars were backed by gold. That meant foreign governments could redeem their American dollars for gold at $35 per ounce.

But the 1950s and 1960s saw ballooning deficits, inflation, and swelling debt from welfare and warfare as America's share of the world economy shrank.

So Kissinger and Nixon hatched the petrodollar system, whereby the United States would provide political and security support to Saudi Arabia's royal family. In exchange, all oil deals would have to be transacted exclusively in dollars, and the House of Saud would buy lots of Treasurys with their greenbacks.

In effect, this guaranteed a constant and elevated (though artificial) demand for U.S. dollars worldwide.

But still, using the unbacked dollar as a world reserve currency is a massive experiment in fiat money.

It's never been tried before… and it's unlikely to end well.

The Emerging Yuan

In the past few years China established a string of currency swaps with other nations to settle trade, bypassing the dollar completely.

The goal is to help internationalize the yuan by gradually growing its level of acceptance. It's working.

On Dec. 4, 2013, the Wall Street Journal reported that China's growing slice of the world's economic pie saw the yuan overtake the euro and yen in trade finance.

According to the Journal, "That made the yuan the second-most used currency in trade finance but still well behind the U.S. dollar, which backs 81% of trade finance." The yuan now accounts for 8.7%, but it's gaining quickly.

In October, China announced a 350 billion yuan ($60 billion) swap for euros with the European Central Bank. That ranks second only to its previously established 360 billion yuan swap line with South Korea. There's even a 400 billion yuan agreement in place with Hong Kong.

There are as many as 25 such swap agreements in place with various nations, estimated to be worth nearly $1 trillion. Corporate debt issued in yuan has nearly doubled in the past couple of years to around $50 billion.

So clearly, the yuan is being readied for internationalization.

China's central bank has stated the yuan would become "basically convertible" by 2015.

But what the yuan may look like before trading freely is what's most intriguing.

About the Author

Peter Krauth is the Resource Specialist for Money Map Press and has contributed some of the most popular and highly regarded investing articles on Money Morning. Peter is headquartered in resource-rich Canada, but he travels around the world to dig up the very best profit opportunity, whether it's in gold, silver, oil, coal, or even potash.

Agree with you Alice. This financial "teasing" drives me crazy. Fully understand they typically want to hook you into buying some sort of annual financial news service, but they did not do that here. So author Peter Krauth, you've thrown out the scare and the "chum", and buy gold is your advice, that's it??

I would like to know whether to buy gold, bitcoin, or yuan ? I also believe that the value ot the dollar is going to be drastically reduced in the very near future and I should use some of my paper money to buy something that will be more valuable in the future. Please let me know what you would recommend. Thanks, Bruce

Buy gold, Bitcoin will fail, The Yaun is no good at this point. Gold is down, the markets are turning bearish. Gold should see a large value increase in 2014. Consider it being at $1800 an ounce, now at $1200. It's the safest play in my opinion.

When the European banks were having big troubles 3 or 4 years ago, the U.S. Fed offered to bail them out, which it did by printing a bunch of bucks to give to them. In exchange, the Fed made them agree to settle all inter-bank transactions in USDs. I think that that was a genius move on the part of the Fed. It has at least delayed the replacement of the USD, as de-facto international reserve currency, by any other currency. I believe that you are right though, that the Chinese yuan will eventually become the next de-facto international reserve currency. But it will probbly take longer than what we would all hope for.

Most sensible people see the USA and the Uk's debts as fatal in the long term as the Politicians have got there heads totally stuck in the sand. So there is no doubt that given time China will takeover as the Yuan become the world reserve currency in not too many years time. Unless of course our politicians gat their fingers out of their backsides and remove their pig like snouts from the trough.

I'm sure there's a reason why the way to invest in the Yuan hasn't been mentioned.
Could it be that the writer and his buddies are getting in their positions first
before they want to promote it for others to jump in?

The new currencies could be commodities which largely affect the volatility of the legitimate currencies The ability print money means that the actual value in terms of buying power must be comromised One would expect greater volatility in currency's in the future frank

The movie "Last Man Standing" comes to mind… in a world run and rigged by central bankers who aren't answerable to any elected officials [see the shocking Bernanke/Coleman interview by Rep Alan Grayson on YT]… and globally connected, as evidenced by the appointment of CB of Israel's Stanley Fischer as Yellen's co-chair.

Central Banks do manipulate the price of gold by their co-ordinated selling and buying. It moves markets. There is no way that any single global currency, U.S. Dollar or otherwise, in today's global economy can be fully backed by gold. If it does not say "redeemable" in gold or silver then it won't be the same as when our dollar once was. My guess is if our monetary policies continue to cast doubt on the U.S. Government and our fiscal policies, then confidence in the dollar might plummet.

The Chinese yuan would then be relatively more desirable (valuable) if it gathers greater relative confidence in global currency markets. I would expect the Chinese government to partially back its expanding currency with gold. By managing perceptions and public confidence, they could take away from the dollar on FX Exchanges. It could get harder, possibly much harder, for the Federal Government to deficit spend and Treasuries might have much higher interest rates when they do.

The end result of a sizable shift away from the U.S. dollar in future years would be higher import costs, higher inflation, higher interest rates on Treasuries (bonds) and possibly a bond market crisis of some sort. The Federal budget would become stressed if interest payments balloon. The stock, bond, and housing markets would tank and money would leave the country as fast as it is currently coming in, all things being equal. More volatility and risk in every asset class during the transition period for sure. I don't think the next global reserve currency will be issued by a single country ever again. Instead, expect a group of nations or a group of regional countries to float their own or combine like Europe. Alternatively, a "basket of currencies" ( including the U.S. Dollar) might become the basis of the next global financial construct.

With China a currency manipulator, would the yuan as the world's reserve currency have an impact on its ability to do so? I presume it would but am curious and it would in the least serve the purpose of further de-Americanization of the global economy. Interesting, and interesting given China's slowed growth recently whether this macro development will accelerate.

Your email address will not be published. Required fields are marked *

Name *

Email *

Website

6 + six =

Comment

Some HTML is OK

Sign me up for the Money Morning newsletter

About Money Morning

Money Morning is here to help investors profit handsomely on this seismic shift in the global economy. In fact, we believe this is where the only real fortunes will be made in the months and years to come.

Each weekday morning, in a readable style you can digest in just a few minutes, you will reap the benefits of our research and expert experiences.

To get the most out of your visit to Money Morning and MoneyMorning.com, it is possible that you may need to upgrade the web browser you are using. Read more here.